AUTO INDUSTRY

AUTO INDUSTRY

RESCUE PLAN

At a glance

Some details of the Bush administration’s $17.4 billion rescue plan for the U.S. auto industry:

k Auto makers will get $13.4 billion in short-term financing from the Troubled Asset Relief Program, with an additional $4 billion to be made available in February, contingent on drawing down the second portion of the TARP funds.

k The United Auto Workers union will be asked to rework contracts to make wages and work rules comparable with those at nonunion plants in the U.S. owned by foreign automakers by Dec. 31, 2009.

k Auto companies must use the money to become financially viable.

k If a company has not become financially viable by March 31, 2009, its loan will be called and all funds returned to Treasury.

k Auto companies must accept limits on executive compensation and eliminate perks such as corporate jets.

k Debts owed to the government would outrank other debts.

k Auto companies must allow the government to examine their books and records.

k The government has the power to block transactions of $100 million or more.

k Auto companies must comply with applicable federal fuel-efficiency and emissions requirements.

k UAW will be asked to accept stock rather than cash for the billions of dollars of pension and retiree health care liabilities being shifted from the companies to the union.

Source: Associated Press